Innovative Businesses Make UK More Competitive

A report out today from the World Economic Forum (WEF) puts the United Kingdom in 8th place in the world in an annual survey of competitiveness.

Last year the UK was in 10th place but the WEF report said that the country had benefited from both an efficient labour market as well as innovative businesses to rise to 8th in the table.

The report’s rankings are based upon figures from the Global Competitiveness Index (GCI) which was first developed in 2004. The GCI uses data on what it calls the "12 pillars of competitiveness" such as national institutions, infrastructure, health and education(primary and higher), policies and other factors to come to a figure. Markets and technology are also taken into account when ranking a country in the GCI.

One of the UK’s weak points however is its "macroeconomic environment" which includes GDP and unemployment. In this area the UK is 110th in the world.

The move up to 8th place this year puts the UK just behind the United States, in 7th place, with the all but one of the top 6 slots filled by Northern European nations.

Switzerland tops the league as it did last year, followed by Singapore, which was also a non-mover in second, then Finland, Sweden, the Netherlands and Germany.

Hong Kong is just behind the UK in 9th position whilst Japan, which has been overtaken by the UK, slips down into 10th place.

Northern and Southern Europe

The UK’s neighbour, Ireland, is in 27th place in the world rankings and France is ranked as 21st, with rest of the troubled Euro "PIGS" countries of Portugal, Italy, Greece and Spain in 49th, 42nd, 96th and 36th places respectively.

The WEF report therefore shows a clear "north-south" divide in Europe where the ailing southern states have suffered from a series of problems. Portugal, Italy, Greece and Spain have suffered from a severe lack of competitiveness and, with their soveriegn debt crises, high levels of unemployment too.

The US

Like the UK, the United States also suffers from macroeconomic factors, and whilst ranking well for its innovative and sophisticated businesses, suffers from concerns over its current economic policies, kept in "gridlock" by its two deeply divided and partisan political parties.

The United States’ GDP figure is still the highest in the world ahead of China, Japan, Germany and France with Brazil taking 6th spot over the UK now in 7th.

Klaus Schwab, the Founder and Executive Chairman of the World Economic Forum, said of the latest report:

“Persisting divides in competitiveness across regions and within regions, particularly in Europe, are at the origin of the turbulence we are experiencing today, and this is jeopardizing our future prosperity.”

“We urge governments to act decisively by adopting long-term measures to enhance competitiveness and return the world to a sustainable growth path.”

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